Avnet 2013 Annual Report Download - page 31

Table of Contents
funds among various locations under certain circumstances. Management does not believe such restrictions would limit the Company’
s ability to
pursue its intended business strategy.
During fiscal 2013 , the Company utilized $262.3 million
of cash, net of cash acquired, for acquisitions. The Company expects to continue
to make strategic investments through acquisition activity to the extent the investments strengthen Avnet’
s competitive position and meet
management’s return on capital thresholds.
In addition to continuing to make investments in acquisitions, the Company may repurchase up to an aggregate of $750.0 million
of the
Company’
s common stock through a share repurchase program approved by the Board of Directors (as amended in August 2012). The Company
plans to repurchase stock from time to time at the discretion of management, subject to strategic considerations, market conditions and other
factors. The Company may terminate or limit the stock repurchase program at any time without prior notice. The timing and actual number of
shares purchased will depend on a variety of factors such as price, corporate and regulatory requirements, and prevailing market conditions.
Since the beginning of the repurchase program through the end of fiscal 2013 , the Company repurchased 17.9 million
shares at an average
market price of $29.38 per share for total cost of $525.5 million . Shares repurchased were retired.
During periods of weakening demand in the electronic component and enterprise computer solutions industry, the Company typically
generates cash from operating activities. Conversely, the Company is more likely to use operating cash flows for working capital requirements
during periods of higher growth. During fiscal 2013 , the Company generated $696.2 million in cash from operations as revenue declined
1.0%
over the prior year. Management believes that Avnet’s borrowing capacity, its current cash availability and the Company’
s expected ability to
generate operating cash flows are sufficient to meet its projected financing needs.
The following table highlights the Company’s liquidity and related ratios for the past two fiscal years:
COMPARATIVE ANALYSIS — LIQUIDITY
______________________
The Company’s quick assets (consisting of cash and cash equivalents and receivables) increased 4.7% from June 30, 2012 to
June 29, 2013
primarily due to an increase in receivables as a result of the change in foreign currency exchange spot rates at June 30, 2012 and the year-over-
year decline in revenue. These factors, when combined with a decrease in inventory, led to an increase in current assets of
1.2%
. Current
liabilities increased 0.5%
primarily due to an increase in accounts payable and accrued expenses, which was partially offset by a decrease in
short-term borrowings. As a result of the factors noted above, total working capital increased by 2.3% during fiscal 2013
. Total debt decreased
by 4.6% , primarily due to the decrease in borrowings under the 2012 Credit Facility and the Securitization Program, total capital increased
4.7%
and the debt to capital ratio decreased to 32.3% .
29
Years Ended
June 29,
2013
June 30,
2012
Percentage
Change
(Dollars in millions)
Current Assets
$
8,356.9
$
8,254.4
1.2
%
Quick Assets
5,878.3
5,614.2
4.7
Current Liabilities
4,821.4
4,798.7
0.5
Working Capital
(1)
3,535.4
3,455.7
2.3
Total Debt
2,045.2
2,144.4
(4.6
)
Total Capital (total debt plus total shareholders’ equity)
6,334.3
6,050.1
4.7
Quick Ratio
1.2:1
1.2:1
Working Capital Ratio
1.7:1
1.7:1
Debt to Total Capital
32.3
%
35.4
%
(1)
This calculation of working capital is defined as current assets less current liabilities.